The Dow Jones Industrial Average erased about 160 points in 20
minutes of trading today. The reason for the quick drop – an email chain
from Donald Trump, Jr. that said the Russian government backed his
father’s presidential campaign and was trying to damage Hillary Clinton.

When Donald Trump Jr.
was first confronted on Saturday with evidence that he met last year
with a Russian lawyer, he brushed it off as merely a chat about
adoptions of Russian children. Then, on Sunday, following reports he was
told the lawyer had damaging material on Hillary Clinton, he said the
meeting was set up on a vague promise of information “helpful” to his
father’s campaign.

Finally, today, the younger Trump released a chain of
emails acknowledging that he was told before meeting Natalia Veselnitskaya that
her information came from the Russian government as part of an effort
to boost the elder Trump’s White House bid. In the emails, Veselnitskaya
is referred to as a “Russian government attorney.”

Donald Jr.’s
disclosure of the messages capped days of shifting and incomplete
explanations of the June 2016 meeting and contradicted months of blanket
denials by Trump administration officials that anyone involved with the
campaign had contacts with Russians during the election or was aware of
foreign attempts to influence the contest’s outcome. Market traders
digested the news and the market recovered but it shows that political
news has potential to rattle Wall Street.

Helping to fuel the bounce back, Majority Leader Mitch McConnell
said he’s delaying the Senate’s August recess by two weeks after
divided lawmakers have been unable to agree on how to revise health-care
legislation he proposed to replace Obamacare. McConnell said that the
five-week break will be shortened “to provide more time to complete
action on important legislative items.”

McConnell’s move provides
breathing room to finish a health-care overhaul and start on a backlog
of other, must-do business, including a defense policy bill. McConnell
says he plans to unveil a revised health care bill on Thursday. The
Congressional Budget Office will provide an assessment early next week,
and a vote might follow soon thereafter – if they can muster enough
votes.

Republicans appear to be at least seven votes short
of the 50 they need to get a health care bill through the Senate, which
is basically where they were when McConnell unveiled a draft bill more
than two weeks ago. Soon after the draft bill’s release, one bloc of GOP
senators (Ted Cruz of Texas, Ron Johnson of Wisconsin, Mike Lee of Utah
and Rand Paul of Kentucky) argued that the bill was insufficiently
conservative and did not repeal enough of Obamacare.

A separate bloc of
more moderate Republican senators (Shelley Moore Capito of West
Virginia, Susan Collins of Maine, Dean Heller of Nevada and Rob
Portman of Ohio) said the bill was too conservative. Lisa Murkowski of
Alaska, another more moderate Republican, has been noncommittal about
backing the bill.

If this process were going well for Republicans, by
now some of the hesitant members would have proposed changes to the
bill, McConnell would have said he is adopting those changes, and these
members would say they were voting for the bill, pending those changes.
That full cycle has not happened yet with any of these members. Some
have publicly proposed ideas that McConnell has not yet said he will
adopt, presumably because he knows those ideas won’t fly with other
members.

Others have not, at least publicly, given any kind of wish
list, suggesting that they would like the bill to die.

Lawmakers are also months behind schedule on the budget, face a
deadline to raise the debt limit and must pass an appropriations bill by
Sept. 30 to avoid a government shutdown. Of interest on Wall
Street was the prospect that Congress might still be able to work on
tax reform.

There is some tax reform taking place, not in Washington, D.C., but Washington state. The Seattle city council voted unanimously Monday
to institute an income tax on the city’s highest earners. The measure
will levy a 2.25 percent tax on individuals who make more than $250,000
and joint filers who make more than $500,000.

The tax is expected to
generate an estimated $140 million in new revenue for Seattle, which
leaders say they hope to use to lower the burden of more regressive
taxes like the city’s property tax, to plug any holes from potentially
diminished federal funding, and to bolster the city’s public services.

Currently, Washington is one of the few states that don’t levy a
personal or corporate income tax. No cities in Washington levy a tax on
income, either. That’s partially why the Institute on Taxation and
Economic Policy found in 2015 that
the state has most regressive taxation system in the entire country,
with low- and middle-income residents paying far more in state and local
income taxes compared to top earners.

Traders are also looking ahead to the start to the next earnings
season. Key companies, including such major banks as JPMorgan Chase,
Wells Fargo and Citigroup are scheduled to report on Friday. By and
large, financials are expected to post mediocre trading revenue this quarter.

After four straight quarters of rising income from trading, the biggest
U.S. investment banks spent the past few months in a renewed slump.
Shareholders will soon see how dull it’s been. Analysts estimate the
five largest firms will say their combined revenue from trading dropped
11 percent from a year earlier to $18.4 billion — the smallest haul for a
second quarter since 2012.

In June, four of the index’s 10 components
increased, while five declined and one remained unchanged. Notably, the
gauge of expected business conditions fell six points during the month, a
move NFIB called “significant.”

The latest Job Openings and Labor Turnover Survey, known as JOLT,
shows the number of job openings in the U.S. fell sharply in May as
companies hired the most people since 2004. Job openings fell by 301,000
in May to 5.66 million, just one month after reaching the second
highest level ever.

The catalyst appears to have been a big surge in
hiring. Some 429,000 people were hired in May, marking the biggest
increase since March 2004. The quits rate, meanwhile, rose a tick to
match a post-recession high of 2.2%. Quits measure how many people leave
their jobs by their own choice. A higher number suggests Americans are
confident enough about the economy to more readily change jobs.

The
snapshot of the labor market in May points to a strong labor market in
which companies are willing to hire and layoffs remain near decade lows.

A day ahead of Federal Reserve
Chair Janet Yellen’s testimony to Congress on the state of the U.S.
economy, two of her colleagues cited low wage growth and muted inflation
as reasons for caution on further interest rate increases.

Fed Governor
Lael Brainard supported the June rate rise and today she said she
embraced the plan to reduce the balance sheet “soon,” but suggested her
support for any future rate increases will depend in part on how
inflation shapes up.

Meanwhile, Minneapolis Federal Reserve Bank
President Neel Kashkari said he finds it hard to believe that the U.S.
economy is in danger of overheating when wage growth is so low. Kashkari
said that when businesses tell him they cannot find skilled workers, he
tells them to provide training and to pay more.

Net neutrality is the idea that internet service providers (ISPs)
treat everyone’s data equally—whether that’s an email from your mother, a
bank transfer or a streamed episode of The Handmaid’s Tale. It means
that ISPs don’t get to choose which data is sent more quickly, and which
sites get blocked or throttled.”

One of the key fights over the future
on the Internet is back on the battlefield this week, as net neutrality
is once again at risk. About 200 internet companies and activist groups
are coming together this week to mobilize their users into opposing US
government plans to scrap net neutrality protections.

The internet-wide day of action,
scheduled for Wednesday 12 July, will see companies including Facebook,
Google, Amazon, and others notify their users that net neutrality – a
founding principle of the open internet – is under attack.

Today is Amazon Prime Day, but if you want a better deal, as in free –
try visiting a 7-11 convenience store, Slurpees are free today. Or Try
Chick-fil-A, for a free sandwich – if you are dressed like a cow, or
wearing something that looks like a cow.

This might be the best deal to be found. If you are 62 years of age or older, you can get a lifetime pass
to any and all National Parks for just $10, and you can take a friend
along for free, for the rest of your life. But come Aug. 28, that fee
will raise to $80. The pass grants lifetime entry to more than 2,000
sites and parks across the country. Those who purchase the passes while
they are $10 will still be able to use them without an additional
charge.

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